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How to Research the Market Before House Hunting in California

In a previous article, we explained some of the important steps to take when house hunting in California. One of the recommended steps was to research your local real estate market before you start shopping for a home. This article explains how you can conduct local housing market research like a pro.

Researching the Market Before House Hunting

Did you know that real estate market conditions can vary greatly from one city to the next? It’s true. In fact, we often see significant differences from one neighborhood and community to the next.

Every local real estate market in California is unique. So before you start house hunting, you might want to spend some time researching local market conditions in the area where you plan to buy. Here are three specific steps you can take.

1. Review recent home sales on property listing websites.

Most home buyers realize that websites like and Zillow can show you homes that are currently for sale. But these types of websites can also show you homes that have sold recently.

This is valuable data when it comes to house hunting. In fact, it’s arguably the best way to determine how much to offer for a particular house. So it’s a great place to begin your market research.

The process itself is fairly straightforward. Just go onto a website like or Zillow and do a standard property search for the city where you want to buy. Next, filter the results so that it only shows you “sold” homes.

When you adjust the search parameters in this way, you’re no longer looking at properties currently listed for sale. You’re seeing houses that have actually sold in the area where you’re planning to buy, usually within the past 30 to 90 days.

This is one of the best ways to get a feel for the local real estate market, and sale prices in particular. Later, when you’re actively engaged in the house-hunting process, you’ll have an easier time deciding if a home is realistically priced, or overpriced.

2. Research supply and inventory conditions in your area.

The difference between a buyer’s market and a seller’s market usually comes down to one thing. Inventory.

  • In a buyer’s market, there are usually more homes listed for sale than there are buyers currently seeking them. As a result, houses tend to sell more slowly, and sellers have to go above and beyond to attract offers.
  • In a seller’s market, the opposite is true. There aren’t enough homes on the market to satisfy the demand from buyers, which leads to fierce competition among those who are seeking a home to buy.

Before you start house hunting for a home in California, research the current inventory situation in your local market. Once again, the Internet is your friend. You can research these types of topics with a quick Google search.

For instance, a home buyer in the Sacramento area might do a search for “Sacramento real estate market inventory” or “Sacramento housing market supply.”

The next step is to click over to the Google News side of things. You might get some relevant information within the main search results page. But you’ll find the most recent information by clicking over to the news results.

This kind of research is critical when house hunting in California. Among other things, it will help you figure out where you stand in terms of bargaining power and market leverage.

For example, if you discover that homes are in short supply and multiple-offer scenarios are common, it would probably me a mistake to offer less than the seller’s asking price. On the other hand, if you find out there’s a surplus of homes on the market, you might have more bargaining power.

3. Research home-price trends to see if urgency is warranted.

Here’s another opportunity to play Google detective. You can use the Internet to research home-price trends in the real estate market where you plan to buy.

This is another important research strategy when house hunting in California. Among other things, it can help you determine whether or not a sense of urgency is warranted.

For example, if you find out that home prices are rising steadily within your local housing market, you’ll probably benefit from buying a home sooner rather than later. Doing so could prevent you from paying a higher price down the road.

On the other hand, if you determine that home prices are rising modestly — or that they’ve leveled off — you could probably take your time when house hunting. In this scenario, taking a few extra months for a home search probably wouldn’t cost you much, if anything.

All of these house-hunting research strategies have two things in common:

  • First, you can conduct all of this research online. The Internet is the home buyer’s best friend, especially when it comes to market research.
  • Secondly, all of these strategies allow you to enter the house-hunting process with a better sense of local market conditions. And that kind of knowledge can go a long way, when it comes to making an offer and negotiating with sellers.

Mike Trejo

Mike Trejo is a Bay Area mortgage broker with 20+ years of knowledge and experience.

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